Kenilworth you said, "They will always be after those who pay less than 10% of their profits, retaining 90%+ for themselves. Unfortunate but there you are."

That may be true, and i accept it may also be fair.  But Betfair got greedy, they had a PC structure charging 20% based on your last 60 weeks activity.  That was a thorn in the side, but the introduction of a lifetime PC of 40-60%  became a big disincentive to offer market prices for some and to straight bet for others.  Parasitic bots probably less so.

In my opinion Betfair need to change their pricing structure so that it does ensure that successful people pay more than 10% of their profits, but at the same time incentivise by not being as punitive as charging 60%.

The 60% payers have a lifetime average comm rate of less than 5%. In order to keep it this low losing is a very rare event. As a result they are effectively keeping 30 to 40% of their guaranteed profits. Not a pleasant experience but still a profit.

Those who qualify to pay 40% can have a lifetime average comm rate of anywhere between 10.1% and 39.9%. How can someone on 39.9% be lumbered with the 10.1%ers? By being on a lifetime average of 39.9% you must have frequent losing weeks. With no refunds of Premier Charges to compensate for losses how is it possible for these unfortunates to post a net profit at all?

They seem to be the worst penalised by the charge yet provide far more turnover and liquidity to Betfair.

It seems totally illogical to me.

'As a result they are effectively keeping 30 to 40% of their guaranteed profits.'

* After the Premium Charge has been deducted that should read.

The compounding effect of P/C verses losses is very tough at 20 percent, 40+ I just can not see how an account can operate unless a sideliner, even then you must have losses. The bots just margin and guess make money daily, unless they through a wobbly so the 40/60 percent charge is just a reduction in a guranteed profit.

A reasonable charge is fair for those accounts that use the betfair technology and take money out of the ecosystem; however you will find that these accounts put much more into the ecosystem via liquidity and the compounding / ongoing commission this generates for betfair.

What is the idea behind:

under 5% leads to 60%
under 10% leads to 50%
under 20% leads to 20%

then
under 40% leads to 40%

Its a weird looking graph. Anyone know of another tax regime like this?

kenilworth 18 Dec 13 10:40 Joined: 04 Nov 05 | Topic/replies: 12,952 | Blogger: kenilworth's blog
... I have sympathy for those who bet straight
and pay PC, and I marvel at how they manage to do it...



Kenilworth, it is a mathematical certainty that a large number of straight-betting punters (with no edge) will pay PC at some point. Many losing punters will also pay PC. If there was a PC on roulette (where every player is a 2.7% LOSER on turnover), there would still be plenty of roulette players who will pay PC at some time.

The difference is, if you have a lucky run at roulette, you (should) know it is luck. You (should) know you don't really deserve to pay PC. But if you have a lucky run at sports, you think it is skill. How many PC payers complain that it's unfair because they are not actually using a winning system? None. To their minds, their system works and they have the profit to prove it. But it is a mathematical certainty that many PC payers ARE NOT EVEN USING A WINNING SYSTEM!

Too many people who ought to know better, have bought into the completely bogus idea that a profit AT ANY POINT over 250 markets indicates a +EV punter.

There seems to be a number of people who say they are 'likely to pay PC in the next year or two' but are not actually paying it at the moment. Clearly if there is a better deal available elsewhere then it makes sense for you to go there - that is the nature of the market economy. I would just add that the grass is not always quite as green elsewhere as you think it is.....

I understand the point you and others are making Eccles, but I'm not convinced that there is anything else out there that is any better that what you have at the moment - even if there is the possibility of you becoming a member of the PC club some time in the distant future. Perhaps you should just make the most of what you have at present.

Speaking as a small recreational (losing) player paying 5% commission I would be delighted to join the exclusive PC club - sadly I'm simply just not good enough.

Why is Betfair not talking about all the other Premium Charges in their "Will my account be affected by the Premium Charge?" section of the Help Section? They go on about the criteria you have to satisfy to incur PC1 but make no mention of the other ones. Unless I'm missing it somewhere!!

rcing - If Betfair can get away with the charge without unduly affecting their business model and thus keep the shareholders onside then it seems fair enough to me.

As I said earlier I would be happy to pay PC as I would rather have 50% of something, than nothing at all (or less than nothing in my case) Everyone will view this through their own situation and as I started claiming the state pension earlier this year, and the best footballer I have ever saw was Johnny Haynes you will get some idea of where I'm coming from....

Dont get me wrong, if you have reached where you are as a punter from hard work then good luck to you, but I guess there are plenty of people on this thread who are paying PC through trading/bot/courtsiding activities etc and I find it difficult to shed too many tears for them. I was simply trying to give a bit of balance to the thread as there are probably a fair few smaller players on here who have similar views to me even if their judgement on football matters is better tha mine!

"If Betfair can get away with the charge without unduly affecting their business model and thus keep the shareholders onside then it seems fair enough to me."

My point (and the main point of this thread) is that the PC has adversely affected not only PC payers but Betfair and the rest of us. Whether I successfully reach my profit goals or not, I want the exchange to remain a vibrant place to bet for me and others. Betfair have built their name (and bank balance) as a virtual monopoly in the exchange market, yet they seem to treat this part of the site far less well than they used to. Liquidity is everything. They need to encourage it as much as they can.

Looking at recent developments (trialling different discount rates and PC reductions in some markets), they do seem to be acknowledging that something needs to be done. I just hope that they do it, and soon. For ALL our sakes.

CY , before PC came in , did you think to yourself " they should charge winning customers more " ?

CY, It is the accounts that have been established for many years making the markets so that all and sundry can benefit from the near 100 percent books, like yourself and bots (with generally are better than standard industry prices).

Now, many of these market makers are approaching if not alread paying P/C in one guise or another. The point is, as made previously, is 20 percent P/C is manageable, 40 percent plus, you just move on because it is not sustainable over a long period for losing 100 percent of your own money one week or paying 40 perecent off profit another week means, unless you win nearly all of the time, very unlikely, you will lose money.

The market makers therin call it a day, look for alternatives etc, to include myself. thereafter, liquidity decreases exponentionally, the bots do not have any guidelines to feed from, so what happens? the betfair exchange goes through a period of stasis, which has occurred for at least a year or so, if not longer, then it steadily declines until either P/C is revised or the exchange ceases to exist which would be a great shame IMO.

Clear from the answers just posted by "the management" that the current policy of fiddling whilst Rome burns is to continue. Quelles surprise.

trillions   of missing bets are not here  becoming    100 fold trillions  in missing bets  wake up  think of all that 2 to 5% worldwide in missing bets

PTTT - I appreciate the points you make but there does need to be some balance/trade-off. Clearly Betfair are using some of their PC profits to fund the bonuses that I outlined so forgive me if I say yes to those offers. It encourages me (and I suspect plenty of other small fry) to bet here and help keep the market makers in the style to which they have become accustomed. If they were to reduce the PC then I suspect that the offers could disappear - and in my experience turkeys dont often vote for Christmas...

If the bonuses generate profits for Betfair they will have them. If they dont they should not have them. The same is true of the premium charge. The two things are not connected in anyway.

And yes, bonuses and P/C are not directly correlated, i have not recieved a bonus in 13 years

Johnny I don't think anybody is necessarily arguing that lower market liquidity with higher charges maximises exchange profits in the short term... But the pc is a pr disaster and it's in the long term that Betfair will suffer